Premier Rachel Notley’s government has staked too much credibility on its ability to get pipelines built where generations of conservatives got nowhere. So Premier Notley no doubt was sincere when she called the company’s not unexpected decision “an unfortunate outcome for Canadians” and said her government is “deeply disappointed.”

Needless to say, notwithstanding its leaders’ faux tears and faux cries of outrage, the United Conservative Party soon to be led by Jason Kenney is absolutely delighted by this development.

From Mr. Kenney’s perspective, the timing, perhaps, could have been a little more auspicious – as in, slightly closer to the 2019 provincial election. Otherwise, though, the announcement yesterday by TransCanada President and CEO Russ Girling pretty well gave the UCP what it asked for.

The UCP leadership may not be particularly nice guys, but they are no dummies. They understood just as readers of this blog do that the project was kaput, and why. This way, though, they can blame Ms. Notley’s NDP and Prime Minister Justin Trudeau’s Liberal government for the project’s collapse, and claim the regulatory process was their willing accomplice.

In TransCanada’s news release yesterday morning, Mr. Girling only vaguely referenced “changed circumstances” as the reason for dropping the project. But in a letter to the National Energy Board, widely quoted by media, he cited “substantial uncertainty around the scope, timing and cost associated with the regulatory review.” Whether or not it was intended as such, this was a gift to Alberta’s conservatives, who basically oppose regulation of the fossil fuel industry. Period.

Well, you can’t really blame the UCPers for striking while the iron is hot, can you? The NDP did load a lot of their political eggs into that particular structurally unsound basket.

Nationally, despite the best efforts of the federal Conservatives to ratchet up the rhetoric about the company’s cancellation of the project to a hysterical pitch, the end of Energy East won’t likely do much harm to Mr. Trudeau’s Liberals. Indeed, it may make things quite a bit easier for the prime minister, who won’t have to anger Quebecers who might support him to appease voters in Alberta and Saskatchewan who never will.

However, you can expect Alberta’s conservative politicians to be unable to resist the temptation to turn yesterday’s announcement into an excuse for hyperbolic attacks on Quebec and Quebecers, and for indépendantiste minded Quebec politicians to fire back in kind, to the joy of the basest elements in each of their bases.

Indeed, there was no need to wait for this kind of foolish nastiness. Before 10 a.m. yesterday, UCP leadership contender Brian Jean, the former leader of the Wildrose Party, was personally attacking Montreal Mayor Denis Coderre in a fundraising email and interpreting TransCanada’s decision as “an attack on Alberta.” The heading on the hysterical email: “They’ve declared war on Alberta.”

Yeah … yeah …

The only way to end the “War on Alberta,” by the sound of the conservative protestations, would be to set up a mechanism to force the rest of Canada to buy Alberta oil. Last time we Canadians tried that, however, it was called the National Energy Program, and it was the brain child of another Liberal prime minister named Trudeau – Pierre Elliot, that is. Brian Mulroney’s Tory government dismantled its final remnants to the huzzahs of Alberta’s conservatives.

Bullying, intimidation and thuggery at the UCP? Just ask Jeff Callaway

Speaking of emails to UCP members, one of the last we’ll presumably see from Jeff Callaway, the former Wildrose president who was Jason Kenney’s anti-Brian-Jean stalking horse in the UCP leadership race until the day before yesterday, was a doozy.

In it, Mr. Callaway accused one of Mr. Jean’s appointees to the UCP’s Interim Joint Board of sending him “an intimidating email” that “ends with the threat” … “if [he] were not on the IJB [he] would spend some $$ and pound a few nails in [my] coffin.”

“This language is clearly meant to bully and intimidate me and my campaign,” Mr. Callaway whined. “It’s unfortunately characteristic of many of Brian’s most loyal supporters who are angry about me shedding light on the track record of Brian Jean during his time as leader of the Wildrose.”

That’s enough, children! It might not have occurred to Mr. Callaway, or perhaps the Kenney campaign reckons we’ll all have forgotten about this fight by the time they’re saying the same kind of things about the NDP, but it’s probably not a good idea to make your own party sound like a bunch of criminal thugs.

Athabascan

Farmer B

October 6th, 2017

I think TransCanada’s decision to end it’s energy east application were economic to the extent that the changes mmade in the NEB’s scope and mandate by the federal Liberal’s made the process to much of a financial risk. Further, the changes made by the Liberal’s were overtly political. Justin Trudeau is looking towards the next election and is after votes in Quebec. He did not want the Energy East pipeline being debated during the next election campaign so he let the changes they made to the NEB do his dirty work. I think he realizes the majority of his MP’s in Alberta will not get re-elected, I think he is also expecting to lose some seats in BC to the NDP so he is doubling down on Quebec. In my opinion this decision is all politics and about getting Trudeau re-elected.

As for Alberta, the Premier’s narrative of how the climate leadership plan will gain a greater acceptance for Alberta’s oil production within Canada is certainly not working. I would say that within BC and Quebec there is more opposition than ever before. It goes back to that old saying if you give an inch they will take a mile. Pandering to environmental groups by bringing in the carbon tax and shuttering coal plants early has only emboldened the environmental lobby and they continue to demand more and more. Personally I don’t believe there is a solution and imposing a carbon tax and making our electricity more expensive isn’t going to benefit Albertan’s as we come to the realization that our future oil revenue will be much less than expected either taxation or spending(in my opinion both) will have to be adjusted to compensate. With the questionable acceptance of pipelines and the large deficits that the NDP appear to have no solution for the Premier’s future doesn’t look all that bright. Enjoy your day

excerpt: ‘Some of the pipeline’s early backers did describe it as the 21st century equivalent of the pan-Canadian railway. But that was really a rhetorical flight of fancy. The days when Canada’s national infrastructure dreams could be achieved with little concern for their ecological consequences or for the sentiments of local communities are not coming back. Nostalgia, in this instance, is misplaced.’

tom in ontario

October 6th, 2017

“War on Alberta.” War on Christmas, War on Our Way of Life, war on this, war on that.
Isn’t it about time people stopped using such a ridiculous and loaded term?
Actual “war” means artillery bombardments, machine gun fire, bombs and napalm, civilians dead and cities destroyed. Is that what these politicians mean when they accuse someone of declaring war? Grow up boys. Find yourselves a better analogy.

Shaun

J.E. Molnar

October 6th, 2017

There’s obviously an upside to the cancellation of the Energy East Pipeline. It makes the Kinder Morgan Trans Mountain Pipeline that much more imperative and valuable.

Let’s hope B.C. comes to their senses and sees the financial value of what a pipeline can offer their election promises for additional social programs like $15-a-day daycare, improved health care and education.

As for Jean and Kenney; if demagoguery got pipelines built one would be prime minister and the other would be premier by now. Sadly, neither has been schooled in the politics of economics and reality.

The evidence suggests otherwise. In a report from 2014 – KM received tax refunds in two of the previous five years.

This we do know: Kinder Morgan Canada president Ian Anderson informed analysts in
Houston, Texas, last January that the Trans Mountain system received a cash tax
refund of $4.2 million in 2013. This even though Trans Mountain generated $167 million
in distributable cash flow—net earnings plus non-cash items such as depreciation—
available to its U.S. parent.

Anderson’s figures also tell us Trans Mountain has contributed combined federal and
provincial corporate taxes that averaged a meagre $1.5 million over the past five years.
Trans Mountain received a tax refund in two of them.

No benefit to BC but all the risks of oil spills in salmon spawning streams and the Salish Sea.

J.E. Molnar

October 6th, 2017

Kinder Morgan:

B.C. estimates earning more than $2.2 billion in provincial tax revenue and $512 million in property taxes during the construction and operation of the pipeline(Kinder Morgan) over 20 years. It also calculates Kinder Morgan will buy $20 million in greenhouse gas offsets, spend $382 million on First Nations mutual-benefit agreements and spend $11.2 million in community-benefit deals. The company’s contributions to marine safety would be $1.2 billion over 20 years, estimates the province. – Financial Post (Dec. 2016)

BC will receive definitely financial benefits:

A Conference Board of Canada report has determined the combined government revenue impact for construction and the first 20 years of expanded operations is $46.7 billion, including federal and provincial taxes that can be used for public services such as health care and education.

British Columbia receives $5.7 billion
Alberta receives $19.4 billion
The rest of Canada shares $21.6 billion
Municipal tax payments (not adjusted for inflation) total $922 million to BC and $124 million to Alberta over the first 20 years of expanded pipeline operations.

Kang the barbarian

October 7th, 2017

Molnar: And all it takes to wipe out those benefits is one tar spill in the Salish Sea. Like the financial liability of the orphan oil sites and the potential financial mess facing Alberta should one of the Tar Sands tailings pond dams fail, paper, no matter how many zeroes on it, cannot replace living systems.

Political Ranger

Lulymay

October 7th, 2017

My gosh! All these billions and billions being thrown around like they’re ten dollar bills. Of course, no mention of the billions in tax write-offs, both on revenues and contributions to the right wing political parties that demand their piece of the action. However, how about the cost of clean up in and for BC? Trillions, I’m guessing and even with that, the environment will never recover in even my grandchildren’s lifetimes.

If there is so much money out there, why can’t Kinder Morgan (or one of its many tax write-off subsidiaries) just build a refinery on site and dispense with all this environmental risk? Oh, but that would make sense. It could create a number of permanent jobs as well as economic spin off? After all, working people pay taxes and spend locally, don’t they? How come this is never factored in along with all this proposed billions in economic benefit?

And lastly, about 15 years ago, the Arizona Republic, an extremely right wing, conservative in Phoenix, Arizona, did an extensive article on Kinder Morgan which also included the information that Kinder Morgan had the WORST record of pipeline maintenance and safety in the whole of the United States. And you want them to spread their malignancy into BC as well??? Give your head a shake and let those billions flow free, because that, in reality, is what they are.

David

October 6th, 2017

I understand the Federal Conservatives political calculations on this issue. They are the only Federal party that is pro pipelines, the Liberals are ambiguously supportive and other Federal parties even less so. This cancellation does not help the few Federal Liberals MP’s in Alberta and Saskatchewan, nor does it help several Liberals in traditionally Conservative seats in New Brunswick and elsewhere and the Conservatives have virtually no hope in anti pipeline Montreal anyways. They hope it helps swing them in 5 to 10 seats, not big number, but enough to chip away at the Liberal majority.

It is less clear how this issue will play provincially here. Canada has dithered for more than a decade on pipelines, while many other countries have built them and there already is a tremendous frustration about this in some parts of the west. To be fair, the previous Federal Conservative government initially tried to ram things through and that may have led to a lot of the opposition. Also, the reasons for this cancellation are not clear cut. Yes, the increased regulatory burden may have played some part, but the big decline in oil prices and the revival of Keystone XL, since the pipeline was proposed may be much bigger factors.

Regardless of the reasons, the frustration still exists – our Premier expressed it more diplomatically as being deeply disappointed, the soon to be retiring Premier Wall from Saskatchewan, just let it rip against the Prime Minister, fairly or not. Perhaps if Keystone and another Canadian pipeline moves ahead, that frustration will dissipate . However, if that does not happen, it may continue to build until it explodes into anger and Mr. Kenney is ready and eager to channel that anger for his political advantage.

The Eastern pipeline could have been a good opportunity for nation building. It would have provided good middle class jobs to less well off areas of Eastern Canada and help them benefit more from Alberta’s resource wealth, while lessening Alberta and Canada’s dependence on the US and international energy markets. It is ironic that part of Pierre Trudeau’s National Energy Program, so opposed by the Conservatives and Kenney, would have likely resulted in a pipeline like that being built over 30 years ago. I am sure that the cancellation will also give some Alberta Conservatives an opportunity to engage in one of their favorite past times – Quebec bashing. However, while the Mayor of Montreal was a vocal opponent, we should not ignore that it was supported by others in Quebec and in other parts of Quebec. Yes, there was some opposition, but there was also support.

In the meantime, perhaps Alberta should consider building more upgraders and doing more refining here. If we can’t help out the maritimes with good middle class jobs, perhaps we should at least try to have some of them here. It may be an expensive proposition, but it is within our control, unlike those pipelines, which are not. A lot of the opposition relates to raw bitumen and the safety and environmental concerns about spills in water, which are be much worse than spills of refined oil. Lets just do it now. A decade has already been wasted on this intractable issue, lets not waste another.

Sam Gunsch

Farmer B

October 6th, 2017

Personally there is no doubt that we need another rail line from the western provinces to the BC coast to facilitate more efficient grain movement. There are many bottlenecks in our present system and less than adequate capacity and not enough competition. There are many times during the year when deliveries to grain elevators are over a month behind because trains haven’t shown up. Last year I had grain booked for January that didn’t go until the end of March.

Political Ranger

October 6th, 2017

Thanks for the link Sam.
It is just breath-taking to read the nutjobs even here on this post going on about jobs lost. That anyone alive and breathing today thinks that petro-development is about jobs is indicative of just how far up their fundament they have their heads. That someone who obviously puts a great deal of thought into his analysis believes there is such a thing as “pandering to environmental groups” and that it is a bad thing is incredulous.
Just where in hell do these people live? Where do they think their children will live? And jobs? – c’mon guy’s, give yer empty heads a shake. This is the 21rst century! If you and yer fellow RWNJ don’t destroy the place there won’t be any welding jobs for your kids. Not for humans. It’ll be done by robots. If yer type get’s it’s way ther won’t be any jobs – period!
But the link to the article Sam, was informative and disturbing. Usually after the story one can scroll down to the comments and get some real down and dirty comments; usually the typically outrageous commentary from some guy in his mothers basement.
The disturbing part was that the commentary from RWNJ’s like Wall and other Conservatives was indistinguishable from the comments section. Deeply disturbing.

excerpt: The Energy East pipeline was never a Plan B project. It was a Plan C project — and it was always a stretch.

Its wonky economics were only going to make sense if oil stayed at $100 or more a barrel, and if every other project to expand pipeline capacity — Keystone XL, Northern Gateway, Kinder Morgan — failed.

From the moment I saw that map of a 4,500 kilometre pipeline from northern Alberta to Saint John, N.B. back in 2013, I knew it made no sense. What was Energy East for? Feeding three refineries in Eastern Canada that had no supply issues in order to sell low-cost bitumen to markets in Europe and Asia? All that for a bargain price of $15.7 billion?

Sam Gunsch

excerpt: ‘In Alberta, it’s that seventies show all over again, blaming Prime Minister Trudeau like they blamed his father Pierre. But really, this pipeline was, if not a sham, definitely Plan B if the Keystone pipeline was rejected by President Obama (which it was)- as Chris wrote in TreeHugger 4 years ago, “Supporters of Keystone XL have claimed that were it to be rejected, TransCanada would simply find another path to export the oil.” Energy East was a really expensive Plan B thought up to pressure the approval process for Keystone or to provide an alternative, albeit really expensive route.’

Sub-Boreal

October 6th, 2017

What was most infuriating yesterday was CBC’s coverage, especially on The National. Time after time, their reporters and commentators (e.g. on “At Issue”) were making lazy generalizations about reactions in “The West”. Hello? What about all the folks here in BC who were celebrating the latest pipeline demise just as much as their counterparts in Quebec? And the smug, complacent expectation that somehow this makes KM “inevitable”? More laziness. Why not come and talk to people?

Athabascan

Sam Gunsch

October 9th, 2017

I doubt the appointees could reach down into the news staff. I really don’t know why some of their reporters are getting sloppier and seem less professional in their work. Maybe morale is in serious decline and fewer give a damn about bringing a 100% effort every day. I dunno’ but it’s sure disappointing. And re: ‘making lazy generalizations’… CBC has also been repeating, among other BS put out by the corporate sector, more than just a few times, that Energy East is primarily about getting AB oil/dilbit to eastern Canada refineries, when by Trans Canada’s own numbers, over 80% would be exported.

Geoffrey Pounder

October 6th, 2017

New export pipelines and oilsands expansion are incompatible with climate action.
Our grandchildren will not thank us for building pipelines. They will thank us for taking action to protect their climate.
Instead of shilling for oil companies, Notley should respect science and serve the public interest.

Pam

October 13th, 2017

My problem with any of this is the stuff is going somewhere and we see it passing by in the trains that go on the rails not far from our house. More tie ups on 50st..traffic back ups on the road waiting for the train. If it is going to flow is this the best way..kind of feeds itself!

Kim Poirier

Thanks David, for bringing this up. There are a lot of thoughtful comments on the tail end too. If I may give you my perspective, Kinder Morgan TM pipeline through BC is the elephant in this room.

If you people east of the rockies haven’t noticed, our entire economy is based on our environmental assets, whether it’s tourism, fisheries, forestry or foraging, we have a different relationship to our environment than people from away. It is a fundamental part of who we are. Hands up how many of you plan to retire to Kelowna or Qualicum or Comox? You come here with your oil sands money and drive up the real estate market and clog up the healthcare system because you’re retired now. You never paid into our expensive MSP or paid taxes here for the infrastructure, but you can vote. So you change our demographics with that vote and we end up with no voice in the “national conversation”. That you people expect a Province to commit economic suicide for the greater good makes me sick to my stomach. There is no greater good in this. Keep your tar. We will pipeline you some tidewater if you like.

Trudeau was willing to make BC a sacrifice zone with 4 megaprojects approved, giving up 17 seats here to secure what in the “West”? I think he must be pandering to CAPP and the former BC Liberals.

Sam Gunsch

October 7th, 2017

Climenhaga’s post is mainstream when he says this: ‘The project’s economic fundamentals never made much sense, and they don’t make any now.;’

And then, it’s just so much bloody fun watching pro-market economists smack down oil industry flaks and RW leaders on the same reasons Energy East was dropped. Farmers should read Leach, too. And thus get a grip on reality.

Farmer B

October 7th, 2017

So Sam you think farmers need a grip on reality? The reality for me is very simple, at present growing grain whether I grow it conventionally or organically on a large enough scale to make a living depends on the use of fossil fuels. I have seen designs for tractors that use a diesel electric design similar to a train locomotive which offers some fuel efficiencies but still require diesel. Researchers are coming up with different genetic lines of crops that are more efficient with nitrogen use but they still require nutrients. Organic production requires more soil disturbance than conventional no-till cropping systems which can put more carbon in the air. Organics also benefit from having livestock in the mix to provide crop nutrients yet a lot of environmentalists are vegan. My main thought is this, taxing carbon is supposed to reduce its use and turn us to lower emission alternatives. My REALITY in farming is this, at present all the carbon tax will do is make everything I use on the farm more expensive without changing my carbon footprint one bit. We have already improved our efficiencies with no-till farming, soil testing to make sure we are not wasting nutrients, straight cutting our crops which saves one pass with the swather and on and on. If you are not efficient you do not survive, plain and simple. Sam, enjoy your day

Bob Raynard

October 7th, 2017

To get a sense of how monumental this decision is, it is interesting to see the market’s reaction to it. Market reaction to events is definitely not subtle. For example, last May Air Canada announced that they were going to develop their own loyalty program, rather than continue offering Aeroplan points. Shares in Aimia, the company that owns Aeroplan, immediately dropped from $9 to a bit more than $3 and trading in the company went from an average of one to two hundred thousand shares per day to 7 million.

Now compare that to TransCanada shares. On Thursday, they day the announcement was made, shares in TransCanada went up 1%, and on Friday it went up another 0.3%, bringing the share price closer to its recent average, and there was essentially no change in the amount of trading that occurred.

The announcement makes for a good news story, and creates lots of opportunity for politicians and commentators to point their fingers, but it is a non-event.

jerrymacgp

October 7th, 2017

It’s interesting to watch so many trying to assign “blame”, as though this project was Canada’s last great hope. In the rest of Canada, through whose territory any new pipelines would need to be built, there are many, many Canadians who aren’t “blaming” anybody, so much as figuring out who to thank, and to whom goes the credit for this decision. Those “new regulatory hurdles” the right hates so much, are instead seen as part of a stronger, more robust regulatory regime.

Whether to assign blame, or assign credit, depends very much on whose ox is being gored.

There are many, many people in this country who are so totally opposed to any new pipelines anywhere, they will practically lie down in front of the machinery to build them if necessary to stop them. For those people, whose minds are beyond changing, this is a huge victory. Their rationale is simply that the oil & gas industry is harmful to the planet and declining in relevance. In their view, pipelines simply work to prop up an industry that should either be phased out, or shut down outright. No amount of ranting and foot-stomping by Messrs Kenney, Jean, or Scheer, or by Ms Raitt, will change that.

This is the reason. It is about money. If TC cannot see a return on their investment it only makes sense that they should walk away and not spend another dime on the project.

Politicians, being politicians, will fashion this business decision to meet and to satisfy their political objectives.

As to regulations, we only have to look to the US where several years ago their Energy Commission called the US pipeline operated and managed by one of our Western Canadian companies as the worst pipeline operator in the US.